The Competition and Markets Authority has completed an investigation into heating oil suppliers following complaints that firms cancelled existing customer orders and offered new deliveries at substantially higher prices during a period of market volatility caused by conflict in the Middle East. The regulator determined that approximately 1,700 customers were adversely affected by these practices, having had their original orders cancelled despite prior agreements.
Energy prices experienced significant fluctuations during the crisis period, with heating oil reaching a peak of 123p per litre in April, representing a 92% increase from earlier levels. Many affected customers faced a choice between accepting substantially higher prices for replacement deliveries or proceeding without fuel. The CMA estimated that some customers paid between £150 and £350 more than their original contracted prices.
Following the CMA’s investigation and engagement with suppliers, a number of firms have voluntarily agreed to provide compensation to affected customers. Those who purchased replacement oil at higher prices will receive payments reflecting the difference, while customers who did not secure alternative supplies will have their original orders fulfilled at the previously agreed rates. However, the CMA indicated that some suppliers have not yet agreed to compensate customers and stated it is prepared to pursue court-based enforcement action if necessary.
The regulator’s analysis concluded that while wholesale cost increases largely explained the price movements, consumers relying on heating oil lack protections comparable to those connected to mains gas and electricity networks. The CMA has recommended that governments introduce a new regulatory framework for heating oil suppliers, which would establish a supplier register and mandate minimum standards for practices including order cancellation procedures, as well as provide access to independent dispute resolution services.
Approximately 1.5 million UK households, predominantly in rural areas without mains gas connections, depend on heating oil for heating and hot water. Government officials have indicated they will consider the CMA’s recommendations regarding enhanced consumer protections in this market sector.
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